You have to admire the courage of anyone taking the ice bucket challenge.

Not because they get hit with ice water. But because they give away money to try to find a cure for a disease that’s so vexing, treatment has eluded us for decades — ever since Lou Gehrig was diagnosed with ALS in the late 1930s. The lack of a cure, of course, makes life worse than hell for ALS victims, their friends and families.

Much less importantly — but I am an investment writer, after all — it also means it has been impossible for investors and companies to find any angles here. But all that is changing now — good news for ALS victims and investors alike.

Thanks to breakthroughs in genomics and stem cell research, we’re now closer than ever to finding ALS treatments. Funds raised by the shivering ice bucket brigade will help a lot.

But how? And when?

I recently sat down with the CEO of a stem cell company that may have an ALS therapy on the market in two years, and one of the leading ALS researchers, for an update. Here’s your debriefing, starting with a quick primer on this dreadful disease.

ALS: The basics

Amyotrophic lateral sclerosis, aka Lou Gehrig’s disease, develops when spinal cord and brain neurons controlling movement lose touch with muscles. Early symptoms include weakness in the limbs, but eventually, ALS makes it impossible to breathe. So most patients die of respiratory failure within three years of diagnosis. There are about 30,000 patients in the U.S. with around 6,000 new cases each year.

ALS affects all races. But soldiers and football players appear more vulnerable, suggesting that head trauma might help spark it. No one really knows what causes ALS, though, and that’s exactly why it has been so hard to treat.

“When you don’t understand the cause of a disorder, it is very hard to target treatments,” says Eva Feldman, a top ALS expert, who is a professor of neurology at the University of Michigan.

But thanks to new insights on genetic and environmental factors that cause ALS, and the use of stem cell injections to nurture motor-control neurons, Feldman is hopeful that ALS therapies are on the horizon. She likens the outlook to what’s played out with multiple sclerosis. “Ten years ago, there were not many therapies, but now there are a lot of excellent ones.”

Investing angles

For investors, companies like Isis Pharmaceuticals
US:ISIS
and Biogen
BIIB, -3.28%
are one way to go. But the problem is, their potential ALS therapies are just one of dozens of treatments in the pipeline, so they might not move the needle much. A tiny company called Brainstorm Cell Therapeutics
BCLI, -0.48%
may hold promise, but I am a little wary of stocks trading for under $1.

While it’s also risky, Neuralstem
CUR, +0.87%
is the most intriguing ice-bucket stock to me because its ALS stem cell therapy shows early promise, and it is one of the cleanest plays. This is why I own a small position, and I think you should, too.

Neuralstem owns tech used to isolate and grow commercial quantities of neural stem cells that may help cure several neurodegenerative ailments. Targets include ALS, stroke and the problems related to spinal cord injuries. “We are transplanting healthy spinal cord cells into patients, putting them into the motor neuron pools,” says Neuralstem CEO Richard Garr. “They protect and nurture the remaining motor neurons and maybe bring some back to health.”

So far, about 30 ALS patients have been dosed with stem cells, getting injections of over a million of them into their spines. The progress of the first group of 15 ALS patients in Neuralstem’s Phase I trial holds out hope since many of them show little or no progression of the disease afterward, says Feldman, an unpaid consultant to Neuralstem who helped conduct the research.

“The preliminary results from our trial are the first time anyone has ever shown anything like that,” says Garr.

These results have been most well-publicized by Ted Harada, who started the treatment using a cane, and completed a 2.5-mile ALS fund-raising walk without one in 2012, garnering national press coverage in the process.

Researchers just finished dosing the second group of 15 ALS patients with Neuralstem cells in July. So it is too early to know their progress. We should get an update in January. But possibly sooner, since there are a two wild cards here for investors. Patients can, and do, blog on their progress. Researchers can also release preliminary results on their own.

If all goes well, a bigger group of about 30 to 50 ALS victims will be tested next year, says Feldman, who is also director of the A. Alfred Taubman Medical Research Institute, which helps fund her research. “We could be as close as two years away from commercialization,” says Garr.

Besides trials on ALS, tests of Neuralstem’s therapy on spinal cord injury victims will start soon at the University of California, San Diego. It is also conducting tests on stroke victims. And it may have a promising anti-depression medication.

Be wary of the risks

Neuralstem posted losses of $6.7 million in the most recent quarter, but it has nearly $30 million in cash. That takes some of the risk out of Neuralstem as an investment, which I’d advise buying only under $4.30 a share to avoid top ticking temporary spikes.

But it is still risky.

After all, there is no guarantee its stem cell therapies will pass muster in upcoming trials. And companies that miss in this space get hammered.

Biogen lost over a billion dollars in market cap in 2013 when it announced an ALS drug had failed. Last April, shares of Cytokinetics
CYTK, +0.00%
fell below $5 from above $12 on an ALS setback.

If any of these, or other, companies are on to an ALS cure, the ice bucket brigade will surely help researchers find it, given that they’ve raised over $100 million for the ALS Association as of the end of August, compared to $2.8 million the year before. “That’s astonishing,” says Feldman. “It shows the power of positive media and the ability of media to help educate the public. I hope that the ice bucket money goes to fast-tracking new therapies.”

At the time of publication, Michael Brush owned shares of Neuralstem. Brush is a Manhattan-based financial writer who publishes the stock newsletter Brush Up on Stocks.

Michael
Brush

Michael Brush is a Manhattan-based financial writer who publishes the stock newsletter Brush Up on Stocks. Brush has covered business for the New York Times and The Economist group. He attended Columbia Business School in the Knight-Bagehot program.

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Michael
Brush

Michael Brush is a Manhattan-based financial writer who publishes the stock newsletter Brush Up on Stocks. Brush has covered business for the New York Times and The Economist group. He attended Columbia Business School in the Knight-Bagehot program.

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